CZSO: Last year's GDP growth was driven by household consumption

The performance of the Czech economy increased slightly in 2024. Real growth in average wages was reflected in a recovery in domestic demand and improved performance in services. However, industry has experienced a weakening of external demand. Investment activity declined.

Gross domestic product will increase by 1.0 % in 2024. Annual GDP growth strengthened during the year and in Q4 the Czech economy grew by 1.8 % y-o-y and 0.7 % q-o-q. "Household earnings grew in real terms last year and domestic consumption growth gradually strengthened over the course of the year. However, the limits of household and business optimism were reflected in falling investment. Export-oriented industries were affected by weakening foreign demand, while services, on the other hand, prospered. Overall, our economy grew by 1 % in 2024," Says Jaroslav Sixta, Vice-Chairman of the Czech Statistical Office.

Gross value added increased by 0.3 % last year. The development throughout the year was characterised by a weak performance in manufacturing, where GVA fell by 1.6 % overall. This was offset by the services sector, buoyed by revived consumer demand. In Q4, GVA was unchanged quarter-on-quarter and increased by 1.1 1 % year-on-year. Industry was the main driver of the quarter-on-quarter and year-on-year decline. In contrast, there was a stronger quarter-on-quarter recovery at the end of the year
in real estate activities, and performance in the trade, transport, accommodation and food services cluster also increased.      

Consumer price inflation reached 2.4 % last year, the lowest since 2018. The significant fall in the pace compared to 2023 was due to a moderation in housing and energy price growth, as well as a decline in food and non-alcoholic beverage prices. However, annual consumer price growth accelerated to 2.9 % in Q4. This was mainly due to food prices, which started to rise again year-on-year at the end of 2024. Year-on-year growth in the supply and realised prices of dwellings accelerated further and agricultural producer prices also increased.

The average gross monthly wage of employees rose by 7.1 % in nominal terms and 4.6 % in real terms last year. Although this was one of the most significant increases in the purchasing power of wages in the last two decades, the level of average gross real earnings still did not reach the level of 2019. In Q4 2024, the average nominal wage climbed to CZK 49,229, strengthening by 7.2 % year-on-year and compared to
Q3 last year was higher by 1.7 %. Total employment rose by 0.3 % last year, almost entirely due to services.

Further details are provided in the current analysis Economic development of the Czech Republic in 2024.

CSO/ gnews.cz - RoZ